Assuming That C + I_r + G < C

question 44

Multiple Choice

Assuming that C + I_r + G < C + I + G,then

• A)there is an unintended inventory accumulation.
• B)there is an unintended inventory shortfall.
• C)aggregate demand is less than output.
• D)Both b and c

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Definitions:

Overapplied Overhead

A situation in which the overhead assigned to products or services exceeds the actual overhead costs, resulting in a discrepancy in cost accounting.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead expenses.

Finished Goods Inventory

Inventory that includes items that have been manufactured and are ready for sale but have not yet been sold.

Unadjusted Cost of Goods Sold

The initial calculation of all costs directly associated with the production of goods sold by a company, not including any adjustments for inventory methods or valuation changes.